News: For E-Reader Fans, Competition Is Paying Off

During a press event this week, Barnes & Noble announced a 7-inch color e-reader called the Nook Color. Near the end of a recent flight to Los Angeles, the flight attendant’s voice on the plane’s intercom asked passengers to “power down your books” for landing. Just a couple of years ago those words would have elicited curious laughs. Yet on this flight there wasn’t even a murmur; just the smooth clicks and swipes of power buttons on Kindles and iPads. As I wrote in a post last week about the rise of mobile devices, the e-reader market has skyrocketed over the last few years, with analysts estimating that consumers will buy 19.5 million of them in 2010. The number should reach 150 million by 2013.

But the industry still can’t decide what these devices will look like in the future. Will they end up as dedicated black-and-white devices for reading books, or tablets that are more like computers and move beyond traditional books to include video, apps and the Web?Barnes & Noble has decided to place bets on both horses, selling a black-and-white e-ink reader and now a new color device.

The company’s latest product, the Nook Color, costs $250, comes with a 7-inch color LCD screen and uses a variation of the Google Android operating system. It blurs the line between a classic e-reader and a tablet computer by adding built-in applications that go beyond reading.Although it is still unclear if the color version will be a hit, William Lynch, chief executive of Barnes & Noble, said at a news conference Tuesday that the company had sold over 1 million Nooks since the device was introduced last year.

That numbers seems impressive until you compare it to other devices on the market that have logos of a little apple on the back. The Apple iPad, which costs $500 and up, is clearly not just an e-reader, but a computer, e-reader and Web device all rolled into one, and it has fared extremely well with consumers so far. Apple said in its latest earnings report that it had sold over 7 million iPads in six months.

Then there is the approach taken by Sony, which is steadfast in its belief that consumers don’t want color. The e-ink screens on non-color readers can deliver crisper text than color LCDs and use much less power, but they can’t display moving images.

Phil Lubell, vice president of digital reading at Sony Electronics, said in an e-mail that he believed consumers preferred “a crisp, glare-free e-ink screen that provides the most immersive reading experience possible.”

“Barnes & Noble’s new LCD tablet cannot be considered in the same category as a dedicated reading device,” Mr. Lubell said. “We’ve heard overwhelmingly from book lovers interested in e-readers that electronic paper is their No. 1 reason for choosing an electronic reading device.” (Of course, Barnes & Noble’s chief said during his news conference that customers had “asked for a color e-reader.”)

Although Sony declined to offer the exact number of e-readers it had sold to date, a Sony representative said the company had “passed the million-unit milestone a while ago.”

And of course there’s one more e-reader: the Amazon Kindle. Although not the first to enter the marketplace, the Kindle has definitely made one of the largest splashes. An Amazon representative declined to comment about the company’s future plans for the Kindle, or the number of units the company has sold to date. Analysts believe Amazon has sold between 3 million and 6 million units since the first Kindle was introduced in 2007.

Don’t expect a color version of the scrappy Kindle anytime soon. Jeffrey P. Bezos, Amazon’s chief executive, has repeatedly said that color is “not ready for prime time” when it comes to next-generation e-readers. Mr. Bezos has also said in the past that color Kindles are “multiple years” away.

Holding out for a better color technology could be beneficial for Amazon and Sony, or it could completely backfire. As consumers continue to read more content on color devices that can handle video and deliver a more magazine-like experience, dedicated black-and-white readers could quickly become a niche product.

Although these companies can’t seem to agree on the perfect device, there is one thing that’s clear from the products being peddled: the competition and range of options in the marketplace will keep innovation moving forward and prices moving backward for years to come.